How are who and rose each taxed on the distribution

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Reference no: EM131973818

Who Corporation (a C-Corporation) and Rose each own 50% of Tardis Corporation’s (a C-Corporation) common stock. On January 1, 2017 Tardis has positive accumulative E&P of $120,000. On December 31, 2017 when its current E&P has deficit of $30,000, Tardis makes a cash distribution of $40,000 each to Who and Rose. Who’s stock basis in Tardis is $35,000. Rose’s stock basis in Tardis is $8,000.

How are Who and Rose each taxed on the distribution?

How would Who and Rose each be taxed if instead they received $50,000 distribution each?

Reference no: EM131973818

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